Abstract

In 2011, the global automotive coating market size surged by 10.2% to
USD14.881 billion from USD13.501 billion in 2010; the OEM automotive coating
market size increased by 10.5% to USD7.989 billion from USD7.231 billion; the
automotive refinishing coating market size climbed by 13.5% to USD6.892
billion from USD6.070 billion in 2010. The market of automotive refinishing
coating was driven by the increase in car ownership.

Automotive coating mainly refers to cationic electrocoat and primer surface,
both of which are included in the OEM automotive coating, while automotive
refinishing coating only refers to primer surface. As cationic electrocoat
requires high technological threshold, less than 10 manufacturers worldwide
are capable of the manufacture, let alone mass-production. The major players
cover BASF, Dupont, PPG, Kansai Paints, Nippon Paints and KCC.

BASF is a Germany-based enterprise. Although DuPont is an American business,
the automotive coating business of DuPont was sourced from Germany-based
Herberts Group. PPG is the largest coating corporation in the United States.
Both Kansai Paints and Nippon Paints are Japan-based companies, while KCC is
from South Korea.

As there is a quite low threshold for access into the automotive refinish
coating industry, a host of manufacturers tap into the business which features
a very high degree of market concentration. And the combined market occupancy
of the top 5 industrial players, including BASF, Dupont, PPG, Kansai Paints
and Akzo-Nobel, hit 90%. Although the shipment of these manufacturers is not
fairly huge, but the unite price is rather high. Akzo-Nobel boasts the world's
largest coating corporation, but it is not so powerful in automotive coating
sector. PPG is the world's largest manufacturer of both automotive refinish
coating and automotive coating. But for KCC and Nippon Paints, both are only
engaged in producing OEM automotive coating which is also the hit product of
BASF.

The automotive market of China has seen revival in recent months, with the
vehicle sales volume during Jan.-May up by 1.7% year-on-year to 8.0235 million
units, reversing the year-on-year downward trend during the past four months.
With the launch of economic stimulus policies by Chinese government, the
automobile industry of China is expected to turn better in the second half of
the year.